It’s rare to see the NYT and WSJ philosophically aligned on how the government uses its power, but they and others in press seem to be coming together to raise questions about why the Department of Justice is beating up on publishers, apparently serving the interests of a retailer bigger than the entire industry.
Holman Jenkins Jr. writes in the WSJ, “in essence, Justice says that, beginning in 2008, several plankton, in the form of five publishers, conspired against a whale, Amazon, whose monopoly clout had imposed a $9.99 retail price for e-books.” He argues: “Given Amazon’s dominance, it’s hardly offensive that all five used the opportunity of Apple’s arrival in the market to reclaim that power. Justice calls it collusion. In reality, publishers have nothing to collude about, except maybe Clive Cussler’s next advance. Books don’t compete with each other. Nobody walks into a store and says, ‘Toni Morrison looks expensive today. Give me some Stephen Hawking.’”
Jenkins says, “let’s face it: Publishers have every reason to fear Amazon’s exploitative behavior.” He adds, “the book industry is defending the very survivability of a book industry whose products are anything but uniform.” His closing line: “Judging by Justice’s slobbering over Amazon, as if whatever Amazon wants is the Lord’s ordained order in the e-book market, many of those résumés are headed to Seattle.”
David Carr, writing in the NYT calls the lawsuit and settlements “the modern equivalent of taking on Standard Oil but breaking up Ed’s Gas ‘N’ Groceries on Route 19 instead.” He suggests that “why the crumbling book business is worthy of so much attention from Justice while Wall Street skates is a broader question we’ll leave for another day.” But Carr concludes that “after a week of watching the Justice Department and Amazon team up, I’ve learned that low prices come with a big cost.”
For one more voice, there’s Barry C. Lynn writing at Slate, who also believes “the DoJ got this issue…spectacularly wrong.” He writes:
“Lower prices enable horizontal predation; when a fatly capitalized retailer (like Amazon) wants to bankrupt its less-wealthy direct competitors, it simply undersells them day after day after day. Furthermore, lower prices can be used in vertical predation, against producers; when a powerful retailer (like Amazon) wants to extract more wealth from its now-captive suppliers, it can set prices to promote those firms who accept its terms and to punish those who resist….
“Over time, it became clear that the best way to lower prices over the long run was in fact to allow producers to set higher prices today. That’s because doing so forces producers to compete with producers rather than retailers. And it forces retailers to compete with retailers rather than with producers. The result being that we end up with both producers and retailers doing a better job of serving the consumer.”
Michael Shermer writes another op-ed, for the LAT: “The Justice Department should have left things alone. Essentially, two titans — Apple and Amazon — clashed, and competition was working…. Amazon will gain a government-aided advantage over the competition.”
He adds: “What this lawsuit probably will do instead is return to Amazon the power to monopolize the e-book market through predatory pricing to the detriment of publishers, authors and, ultimately, readers.”